Cat Merger

Merger

Caterpillar entered into an agreement to buy Bucyrus International for $7.5 billion in cash on November 14, 2010. Under the terms of agreement, Bucyrus shareholders will receive $92 per share. Caterpillar will fund the acquisition through a combination of cash from its balance sheet, debt and up to $2 billion in equity. J.P. Morgan Securities LLC provided committed financing for the transaction. Bucyrus would be required to pay Caterpillar a termination fee of $200 million. At the time of closing, Caterpillar Group President, Steve Wunning will have executive office accountability for Bucyrus, along with his current responsibilities for Bucyrus' mining business. The closing of the transaction is subject to regulatory approvals, customary closing conditions, approval by Bucyrus stockholders and expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction has been approved unanimously by the Board of Directors of Caterpillar and Bucyrus International. The transaction has been approved by 73.8% shareholders of Bucyrus International on January 20, 2011. The transaction is expected to close in mid-2011.

Caterpillar Inc. is a company that designs, manufactures, markets and sells machinery and engines. The company is also less known for selling financial products and insurance. Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Caterpillar was ranked number one in its industry and is one of the stronger companies in the Dow Jones Industrial Average index.

Bucyrus International, Inc. designs, manufactures and markets surface and underground mining equipment. The current product line includes a range of material removal and material handling products used in both surface and underground mining. Caterpillar intends to create its mining business headquarters in the current Bucyrus South Milwaukee, Wisconsin headquarters location and maintain the Bucyrus brand for key Bucyrus legacy products.

It is easy to see why a company such as Caterpillar would want to acquire a company such as Bucyrus International. According to the CEO of Caterpillar Doug Oberhelman "For several years, mining customers have been asking us to expand our range of products and services to better serve their increasingly complex requirements." The acquisition of Bucyrus caters to those customers in particular and fits in with the company perfectly. The board unanimously supports the merger and most of Bucyrus stock holders agree. The merger just makes sense for both parties. Both companies deal with the machinery that drives our infrastructure. Caterpillar makes diesel and gas engines for multiple purposes as well as mining equipment. Bucyrus is known mostly for their mining equipment, a department that Caterpillar consumers